Correlation Between Ab Impact and Tiaa Cref

Can any of the company-specific risk be diversified away by investing in both Ab Impact and Tiaa Cref at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Ab Impact and Tiaa Cref into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Ab Impact Municipal and Tiaa Cref Equity Index, you can compare the effects of market volatilities on Ab Impact and Tiaa Cref and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Ab Impact with a short position of Tiaa Cref. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ab Impact and Tiaa Cref.

Diversification Opportunities for Ab Impact and Tiaa Cref

0.03

Correlation Coefficient

Ab Impact  Tiaa Cref

Significant diversification

The 3 months correlation between ABIMX and Tiaa is 0.03. Overlapping area represents the amount of risk that can be diversified away by holding Ab Impact Municipal and Tiaa Cref Equity Index in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tiaa Cref Equity and Ab Impact is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Ab Impact Municipal are associated (or correlated) with Tiaa Cref. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tiaa Cref Equity has no effect on the direction of Ab Impact i.e., Ab Impact and Tiaa Cref go up and down completely randomly.

Pair Corralation between Ab Impact and Tiaa Cref

Assuming the 90 days horizon Ab Impact Municipal is expected to under-perform the Tiaa Cref. But the mutual fund apears to be less risky and, when comparing its historical volatility, Ab Impact Municipal is 2.37 times less risky than Tiaa Cref. The mutual fund trades about -0.04 of its potential returns per unit of risk. The Tiaa Cref Equity Index is currently generating about 0.14 of returns per unit of risk over similar time horizon. If you would invest  3,970  in Tiaa Cref Equity Index on September 16, 2024 and sell it today you would earn a total of  263.00  from holding Tiaa Cref Equity Index or generate 6.62% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Ab Impact Municipal  vs.  Tiaa Cref Equity Index

Ab Impact Municipal

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Ab Impact Municipal has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong primary indicators, Ab Impact is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Tiaa Cref Equity

Risk-Adjusted Performance

10 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Tiaa Cref Equity Index are ranked lower than 10 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak basic indicators, Tiaa Cref may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with Ab Impact and Tiaa Cref

The main advantage of trading using opposite Ab Impact and Tiaa Cref positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ab Impact position performs unexpectedly, Tiaa Cref can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Tiaa Cref will offset losses from the drop in Tiaa Cref's long position.

The idea behind Ab Impact Municipal and Tiaa Cref Equity Index pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Portfolio Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.